Alphabet, the parent company of Google (NASDAQ: GOOG), hit the headline yet again on Tuesday. In many ways, it’s one of the biggest announcements this year for the company and signals a major change in how the tech giant is run. Alphabet CEO Larry Page, alongside co-founder and President Sergey Brin, announced they are stepping down from the company and departing from their executive positions on Tuesday.
Sundar Pichai, the current CEO of Google, will now be taking the reins as CEO of Alphabet as well to fill in the cap. The two co-founders, which have grown Google for over 20 years after starting their company in a garage, will still remain in an advisory role on the board of directors while also retaining voting control over their business.
“With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it’s the natural time to simplify our management structure,” Page and Brin wrote in a blog post announcing their departure. “We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President.”
It’s definitely a strange time for such major departures, especially since Google is facing increasing levels of scrutiny from regulators and politicians over the way it handles data. Both executives, which used to be the public faces of the company, have since been stepping out of the limelight. Larry Page has been noticeably absent from Google’s quarterly earnings calls, while also not showing up for a major tech hearing on Capitol Hill recently.
While the departures likely won’t have much of an impact on Google’s overall trajectory. Pichai has been at the head of Google since 2015 following a major restructuring in the company which led to the formation of Alphabet. The biggest problem Google is facing right now is its ongoing privacy/data issues as well as recent claims from disgruntling employees in regards to the company’s culture and its attempts to suppress criticism. In regards to the latter, several outspoken employees were fired by the company, a claim that employees refute as being an attempt by the tech giant to prevent their workers from organization.
As expected for a company of Google’s tremendous size, the news wasn’t really enough to shake up the stock. Over the course of the day, shares were up around half a percent, gaining another half a percent in after-hours trading. Since the beginning of the year, Google’s stock has gained around 30%, an impressive streak for a mega-cap tech giant.
Google Company Profile
Alphabet is a holding company, with Google, the Internet media giant, as a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products, which include Nest and Google Home, also contribute to other revenue. – Warrior Trading News
